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1965 Supreme(Mad) 26

Madras High Court
RAMAMURTI
Rajagopala Naidu - Appellant
Versus
Aiyyaswamy Chettiar - Respondent
Decided On : 01/25/1965

Advocates:
S. Nainar Sundaram, T.R. Ramachandran and R. Sivapunyam, for Appellant; P.S. Balakrishna Iyer and P.S. Ramachandran, for Respondent.

The cause of action for breach of contract arises on the date of the breach, and not after the damages are ascertained.

Headnote:

LIMITATION ACT - ART. 115 - BREACH OF CONTRACT - CAUSE OF ACTION - COMMENCEMENT OF LIMITATION - DAMAGES - ASCERTAINMENT OF DAMAGES - DISTINCTION BETWEEN OCCASION FOR ASCERTAINMENT AND DATE OF CAUSE OF ACTION.

Fact of the Case:

Plaintiff had a subsisting lease with the second defendant over a premises. During the currency of that lease, the second defendant granted a lease to the first defendant. The plaintiff agreed to surrender his right as lessee over the premises and in consideration thereof, an agreement was entered into between the first and second defendants to the effect that for a period of 15 days, at the time of Deepavali' each year, the plaintiff would be permitted to occupy the downstairs portion in the premises to sell crackers. The defendants repudiated the agreement and the plaintiff filed a suit for damages.

Finding of the Court:

The court held that the cause of action for breach of contract arose on the date of the breach, which was the date when the time for putting the plaintiff in possession of the property had expired. The fact that the plaintiff could not file a suit that very day and that some time may have to lapse for him to determine the quantum of damages does not mean that limitation does not commence to run from the date of the breach.

Issues: Whether the cause of action for breach of contract arises on the date of the breach or only after the damages are ascertained.

Ratio Decidendi: The court held that the cause of action for breach of contract arises on the date of the breach, and not after the damages are ascertained. The court distinguished between the occasion for ascertainment of damages and the date upon which the cause of action arose and from which limitation began to run.

Final Decision: The court dismissed the plaintiff's appeal and held that the suit was barred by limitation.

Judgement

JUDGMENT :- The plaintiff who has failed in the courts below, on a question of limitation, is the appellant in this second appeal. The plaintiff had a subsisting lease with the second defendant over a premises in a busy locality in Rangai Gowder St. Coimbatore. During the currency of that lease, the second defendant granted a lease to the first defendant. The plaintiff agreed to surrender his right as lessee over the premises and in consideration thereof, an agreement A. 2 dated 29-12-1952 was entered into between the first and second defendants to the effect that for a period of 15 days, at the time of Deepavali' each year, the plaintiff would be permitted to occupy the downstairs portion in the premises to sell crackers. Even though this agreement purports to be one between the first and second defendants, the recitals of the agreement taken along with the fact that the plaintiff himself has signed this agreement, leave no room for doubt that the plaintiff also should be regarded as a party to the agreement.

2. On 17-10-1953, the plaintiff issued a notice to both the defendants asking for possession of the premises for a period of 15 days as specified in the agreement. But this claim was repudiated by the defendants on 26-10-1953. The result was that the plaintiff who had purchased trackers with a view to sell them during Deepavali season and make profit, could not do so, and from the evidence it appears that the plaintiff sold his entire stock only by 13-11-1953. As the plaintiff was deprived of a good opportunity of carrying on business in Rangai Gowder St, he sustained damage to the tune of Rs. 5200. This sum of Rs. 5200 is the loss, which he had sustained in respect of the capital invested by him. It may be mentioned that the plaintiff filed the suit O. S. 302 of 1954 for enforcing his rights under the agreement Ex. A. 2 and the same has been dismissed. The courts below have held that the suit O. S. 302 of L954 does not operate as a bar to the present claim. Nothing turns upon this aspect of the matter. Both the courts have held that the plaintiff had made out that he had sustained damages as stated above.

3. In paragraph 3 of the plaint, the plaintiff has admitted that under the agreement Ex. A. 2 he must be put in possession for a period of 15 days prior to Deepavali, so that, at the latest, the breach committed by the defendants had occurred on 6-11-1953. It was contended in the courts below that Art. 115 of the Limitation Act would not apply to the facts of the instant case and that the ease would be governed either by S. 23 or S. 24. I am unable to see how S. 23 or S. 24 has any application to the case, Learned counsel for the petitioner drew my attention to some decisions dealing with a claim for damages between the vendor and vendee, in which it had been held that a cause of action for a suit for damages would commence to run not on the date of the contract or on the breach as such, but only when the vendor or the vendee, as the case may be, had sustained damages as a result of the claim pat forward by a third party with a paramount claim. Learned counsel relied on some of the observations contained in those decisions. I am of the opinion that those decisions are not relevant to the instant case and that the observations contained therein should not be divorced from their context and understood as authority for the position that in every case of a breach of contract, limitation would commence to run not on the date of the breach, but only from the date when the party aggrieved was in a position to fix or quantify his damages. Entirely different considerations would apply to a claim for indemnity. This is a simple case of a breach of contract, the breach consisting in the plaintiff not being allowed to enjoy his promised right of a licence for a period of 15 days. Breach is complete when the time for putting the plaintiff in possession of the property had expired on 6-11-1953, the date of Deepavali. The fact



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